Full Text 01

Internationalization of firms through
acquisition
---A case of post-acquisition market integration management in
Chinese market
Supervisor: Gabriel Awuah

Authors: Yuesi Wu
870628-T121
Yinzi Shui
860227-T242
ACKNOWLEDGEMENTS
This Masters dissertation was written during the spring of 2011 for the
program of International Marketing at Halmstad University. Hereby we would
like to sincerely thank the persons who have helped us finish this dissertation.
Firstly, we would like to express our gratitude to our supervisor, Gabriel
Awuah. He guided us when we need guidance, and gave us excellent
supervision; he inspired us to continue our work when we felt depressed. We
honestly believe that without his help, we would never be able to complete this
dissertation.
Secondly, we are thankful to Ms Dai, who is the CEO of Company A China, she
provided us a great number of primary resources in spite of her busy schedule.
So we can do this study.
Thirdly, we greatly appreciate our friend, who is working in Company A.
Without his help, we cannot connect the CEO of Company A China.
Fourthly, we would like to say thanks to all the members in this seminar group,
especially our opponent who gave us many constructive suggestions.
Last but not least, we would also like to express our appreciation to our
families and friends, who supported us as well during the whole process of our
dissertation.
Halmstad University, Halmstad, May, 2011

Yinzi Shui and Yuesi Wu
ABSTRACT
There are a lot of theories which have been propounded that post-acquisition is a vital
part of the whole acquisition process, especially the management of integration has
taken the majority of post-acquisition. However, no acceptable conclusion has been
made on the market integration during the post-acquisition and how to successfully
manage it. And our purpose is to investigate how companies successfully manage the
market integration through post-acquisition.
Hence the research was explorative in nature and a method of case study was chosen
to conduct the research. In the methodology part, a semi-structured interview was
implemented to collect the data (from Company A). These findings were also
complemented with secondary data such as corporate websites.
In this thesis, the findings of the study show that types and motive of the acquiring
company, macro environment for market integration, market segmentations, market
positioning strategy, and marketing mix are really important categories for successful
market integration management of post-acquisition. Meanwhile, high interaction also
can be found inside these categories. More specifically, the authors find Company A
use horizontal acquisition type to undertake internationalization of Company B, which
leads to the result of carrying out horizontal market integration through
post-acquisition process. Gradually adapting the Chinese local environment,
Company A uses psychological segmentations to divide the segments and makes
its strategy to cover all levels of positioning of Chinese biscuits markets. Integration
of marketing mix is a complex process which concerning the combinations of
advantages from both acquiring company (Company A) and acquired company
(Company B). Consequently, these categories help authors well understand the
successful ways of management of integrating market during post-acquisition.
Keywords: post-acquisition, market integration, marketing mix
CONTENTS
1 INTRODUCTION ...............................................................................................................................1
1.1Background ....................................................................................................................................1
1.2 Research question .........................................................................................................................3
1.4 Delimitations .................................................................................................................................3
2 LITERATURE REVIEW ....................................................................................................................5
3 THEORETICAL FRAMEWORKS ....................................................................................................7
3.1 Acquisition types and motives .....................................................................................................7
3.2 Market integration management of post-acquisition ..................................................................8
3.2.1 Macro environment for the market integration ........................................................................8
3.2.2 Market segmentations ...............................................................................................................9
3.2.3 Market positioning strategy ....................................................................................................10
3.2.4 Marketing mix .........................................................................................................................10
3.2.4.1 Product ..................................................................................................................................11
3.2.4.2 Place ......................................................................................................................................12
3.2.4.3 Price .......................................................................................................................................13
3.2.4.4 Promotion..............................................................................................................................13
4 METHODOLOGY ............................................................................................................................15
4.1 Research approach ......................................................................................................................15
4.2 Case study ...................................................................................................................................15
4.2.1 Case selection ..........................................................................................................................16
4.2.2 Data collection .........................................................................................................................16
4.2.3 Case analysis ............................................................................................................................17
4.3 Reliability and validity ...............................................................................................................17
5 EMPIRICAL DATA...........................................................................................................................19
5.1 Company brief Background .......................................................................................................19
5.2 Acquisition types and motives ...................................................................................................19
5.3 Market integration management of post-acquisition ................................................................21
5.3.1 Macro environment for the market integration ......................................................................21
5.3.2 Market segmentations .............................................................................................................22
5.3.4 Marketing mix .........................................................................................................................23
5.3.4.1 Product and price ..................................................................................................................23
5.3.4.2 Place ......................................................................................................................................25
5.3.4.3 Promotion..............................................................................................................................26
6 ANALYSIS ........................................................................................................................................28
6.1 Acquisition types and motives ...................................................................................................28
6.2 Market integration management of post-acquisition ................................................................28
6.2.1 Macro environment for the market integration ......................................................................28
6.2.2 Market segmentations .............................................................................................................29
6.2.4 Marketing mix .........................................................................................................................31
6.2.4.1 Product ..................................................................................................................................31
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6.2.4.3 Price .......................................................................................................................................33

6.2.4.4 Promotion..............................................................................................................................34
7 CONCLUSIONS AND IMPLICATIONS ........................................................................................36
7.1 Conclusions .................................................................................................................................36
7.2 Implications of this study ...........................................................................................................38
7.3 Future research ............................................................................................................................38
8 REFERENCES...................................................................................................................................39
9 APPENDIX: SEMI-STRUCTURED INTERVIEW GUIDE ..........................................................46
1 INTRODUCTION
In this chapter, we will present what internationalization of firms is and the
entry mode of the firms internationalization. After that, we will present the
importance of corporation acquisition for internationalization and discuss the
importance of the post-acquisition integration. Meanwhile, the research
question and the purpose will be explored, and the delimitations will be
clarified.
1.1Background
With the rapid development of global economy, a large number of firms realize the
importance of expanding their business in foreign markets and getting involved in
international activities as well, especially the vast majority of firms from mature
countries who are going to gain the market share in the foreign markets (Gao, 2008).
Therefore, internationalization of firms has become a significant means for
corporations to grow.
A large number of researchers have defined internationalization of firms for some
years. White, Griffith and Javalgi (2003) stress internationalization of firms is the
process of through which firms move from operating solely in their domestic
marketplace to international markets (White, Griffith & Javalgi, 2003, pp. 186).
Morgan and Katsikeas (1997), Johanson and Vahlne (1990) consider firms
internationalization is the stepwise process of growing involvement in international
operations which are complex. Both definitions display that there are two major issues
that firms have to face in their international development. One of the issues concerns
internationalization strategy; it handles the globalization of business by the companys
expansion to foreign markets (Jansson, 2007). The second issue concerns the entry
strategy, which is the most important factor in a firms international growth. It mainly
refers to how firms get access to new geographic markets, and how the firms initiate
their business and market and eventually maintain their position in foreign markets
(Riaz & Arshad, 2010).
When firms want to enter into international markets, how they should enter these new
markets is the most important marketing decision (Doole & Lowe, 2008). Kiruba
(2006) indicates that there are five different modes for companies to expand their
operations to foreign markets.
The first one is exporting, which is the transfer of goods or services across different
countries. A large number of firms use this mode to initiate their expansion into the
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international arena (Kiruba, 2006). The second is licensing, through this mode, the
foreign licensee is allowed by the licensor to use one or more rights like patent rights,
trademark rights, copyrights and/or product or process know-how (Doole & Lowe,
2008). Franchising is the third mode, when the marketing goods and services are
transferred to a third party, the franchisee has limited rights from the franchiser to
employ branding, trademarks and products, in return for a franchise fee (Ibid). The
next mode is strategic alliance or joint venture which demands the sharing of the
ownership stake and operating control by both parent companies. Generally speaking,
the successful strategic alliance leads to a joint venture (Kiruba, 2006). The last one is
the wholly owned subsidiary in which the parent company owns 100% subsidiarys
stock, acquisition or establishes that a new firm can set up a wholly owned subsidiary
(Ibid)
These decisions will affect a companys future progress of internationalization, thus
choosing an appropriate entry method is crucial for the firms to go abroad. Among the
different entry strategies of internationalization, in order to implement the scale
economies in internationalization, numerous multinational firms are increasingly
adopting the mode of acquisition (Shimizu, Hitt, Vaidyanath, & Pisano, 2004; Stahl,
Mendenhall, Pablo, & Javidan, 2005). According to UNCTAD (2000), the value
through acquisition increased rapidly from less than $100 billion in 1987 to $720
billion in 1999. This means that the acquisition has become the dominant strategy for
expanding foreign markets (Slangen, 2006).
As McDaniel (1999) indicates, an acquisition strategy is a comprehensive approach of
high-level technical and business whose purpose is to achieve program objectives
with constrained resources. These program objectives may be varied, such as the
corporate growth, competitive advantages achievement in existing product markets,
market or product extension, or risk reduction (Sudarsanam, 1995). In order to gain
these objectives, the acquisition strategy provides an approach for activities like
planning, organizing, staffing, controlling, and leading a program which are essential
for program success (Smit, 2001). Consequently, the business organizations usually
utilize acquisition strategy to survive and grow in foreign markets (Kim & Olsen,
1999).
When the company needs to go international, how to minimize the time and cost of
satisfying the local market, which is one advantage of developing acquisition strategy,
is significant for the company (McDaniel, 1999). For companies found in European
countries, the most efficient way to produce short-term profits is to grasp the market
entry speed, which can be realized by obtaining an existing company in the local
market (Doole & Lowe, 2008). Whats more, acquisition companies will give prompt
access to a well trained labor force, existing customers, and contacts of former
suppliers, brand loyalty, a well established network of distribution and an abundant
source of revenue (Ibid).
Therefore, acquisition strategy becomes the big step for companies when they plan to
enter into the international market. In order to occupy the local market immediately, it
is necessary for the firms to acquire a company which has already entered the market.
However, between the companies performing the acquiring and the acquired
companies, these acquisitions have usually led to slower and looser integration and
this will finally lead companies to gain fewer synergistic benefits than were expected
initially (Vaara, 2003). In other words, the post-acquisition integration is crucial for
final success.
According to Lohrum (1996), the post-acquisition integration includes all changes
such as creating value (Haspeslagh & Jemison, 1991), improving learning (Leroy &
Ramanantsoa, 1997) and adopting different cultures (Vaara, 2003) implemented in the
acquired company after an acquisition. All these changes are the challenge for the
firms to obtain success in the acquisition.
Once acquiring firms want to achieve success, how to gain a host of market related
competitive advantages quickly are important (Weber & Dholakia, 2000). Birkinshaw
and Bresman (2000) stress that superior performance in market will lead acquiring
firms obtain final success. These mean market integration is an important element for
acquiring firms final success.
1.2 Research question

Although market integration will lead acquiring companies gain success, a lot of
acquisitions cannot realize the synergistic benefits of market exactly, because of the
competitive pressures in todays market (Weber & Dholakia, 2000). Therefore, many
unforeseen post-acquisition integration problems are market related (Ibid).Thus, the
main research question will focus on the following area
-How do companies successfully manage the market integration during the
post-acquisition?
1.3 Purpose
Since there are several ways of managing the market integration during
post-acquisition, it is very important to find a successful way to manage it. In this
thesis, the authors want to exploit successful management of market while companies
are executing post-acquisition integration.
1.4 Delimitations
Certain delimitations evident should be taken into consideration in this dissertation.
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Since this study is based on internationalization, the acquisition is only about

cross-border acquisitions which are made by firms in foreign countries (Sudarsanam,
1995), the domestic acquisitions are not concerned in this dissertation.
Furthermore, previous researches about internationalization through acquisition have
mostly emphasized the process of acquisition; various acquisition processes are
employed in order to explain how to achieve successful acquisition. In this study, the
authors will not research the acquisition process, and the post-acquisition integration
about market integration management is the main research target in our study.
Meanwhile, a great number of researches about acquisition study the developed
countries. Therefore, in this dissertation, the authors will focus the developing country.
However, we cannot collect enough market resources from different developing
countries, and China is a large market in developing countries, so we only focus on
Chinese market. In addition, this dissertation is focused only on the biscuit industry
and the companys marketing form is only based on Business to Customer (B-to-C).
2 LITERATURE REVIEW
In this chapter, we reviewed what previous researchers have found about the
importance of acquisition strategy, its major process stages and among the
different acquisition stages, and the necessity of studying post-acquisition
integration. To complete the successful post-acquisition integration, integration
of marketing has also been explored.
Since acquisition has become an increasing important vehicle for companies to

undertake internationalization, researches about how to achieve successful
cross-broad acquisition outcomes have been discussed since the 1980s (Clifford &
Smith,1985; Duncan & Mtar, 2006; Kim & Olsen, 1999; Lin & Wei, 2006; Parsons,
1994; Ranft & Lord, 2002; Rao & Mahajan & Varaiya, 1991; Very & Schweiger, 2001;
McDaniel, 1999). During that time, acquisition had become the biggest process in the
world. Over 29 thousand contracts which valued $2.5 trillion had been signed all over
the world up until 1998(citied in Very & Schweiger, 2001).
Making an acquisition program is a sophisticated activity with a lot of stages (Very &
Schweiger, 2001). The activity specifically involves several phrases. First of all is the
pre-acquisition stagewhich encompasses developing a strategy for the target, making
an acquisition strategy, searching and screening for target firms and evaluating the
candidates. The second stage is the acquisition stage containing screening and
negotiating with the target firm and other stakeholders. The last stage is the
post-acquisition stage which obtains integration between the acquiring firm and the
target firm as well as culture (Very & Schweiger, 2001; Hubbard, 2001; Parsons, 1984;
Krger & Stewageens, 1994; Schniederjans & Karen, 1989; Krogh, 1994; Hubbard,
2001; Cartwright & Cooper, 1996; Daniel & Metcalf, 2001). And among these factors,
post-acquisition integration is obvious an important factor to explore, because of its
high contribution on the final acquisition success (Child et al., 2001; Haspeslaph
&Jamison, 1991; Kearney, 1988).
Quah and Young (2005) have explored that successful post-acquisition management,
based on the North American acquisition companies, should be divided into several
stages, involving in level of integration, post-acquisition changes, changes of time,
cultural influences and employee reactions. Among these factors, level of integration,
an important aspect of post-acquisition integration has been exploited to be influenced
by lots of factors, which includes strategic task needs, organizational needs
(Haspeslagh and Jemison, 1991), and environmental factors (Pablo,1994). Moreover,
researches also show process of post-acquisition integration can also be a crucial
factor (Birkinshaw & Bresman, 2000). In their research, separation of task integration
process and human integration process is a big step forward for the final acquisition
success.
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However, authors of this thesis find there is a gap between these researches: although
previous researches have explored several areas of post-acquisition integration, very
few researches have noticed the importance of market integration. Therefore, in this
thesis the authors will focus on the market integration area to explore how company
successfully manages the market integration during the whole post-acquisition
process.
3 THEORETICAL FRAMEWORKS
In this chapter, we will present the objectives and types of acquisition, which
will lead a proper way to integrate market of post-acquisition. Moreover,
details about how to integrate market of post-acquisition will be present.
3.1 Acquisition types and motives

Melin (1992) points out that a far-reaching concentration processes develop rapidly in
foreign ownership in many markets. McKiernan (1992) indicates that according to
recent empirical evidence, the acquisition has been a main feature of
internationalization.
As a major route to internationalization (Melin, 1992), when companies want to enter
in foreign markets through acquisition, they should define their objectives clearly,
without random or speculative acquisition (Hanson, 1991). According to the Federal
Trade Commission (e.g., FTC, 1973), there are five different types of acquisition
named as horizontal, vertical, product extension, market extension, and unrelated.
Each type of acquisition has its own strategic focus, desired synergies, and
friendlinesss degree, therefore, the resources, levels of expertise, and pre- and
post-combination integration are required differently for each acquisition to be
successful (Buono & Bowditch, 2003). This classification also indicates the degree of
the firms relation and may suggest what the way is for the acquiring firm to position
itself in the long run (Lohrum, 1996).
Horizontal Horizontal acquisition refers to establishing a presence for an existing
product or service range in prospective new markets (Hanson, 1991). This type of
acquisition allows the growth of market share, product differentiation and barriers to
entry or market power to companies (Brozen, 1982). As a number of researches
manifest, this type is the most common, in general, it is also the most successful form
of acquisition (Hanson, 1991).
Vertical A vertical acquisition is one between two firms that had a possible
buyer-seller relationship, thereby combining together. The acquiring companies
expect that they can control the sources of supply and distribution increasingly
(Cromley & Green, 1982). This type of acquisition tends to be prevalent in high
growth industries (Buono & Bowditch, 2003). Larsson and Finkelstein (1999) indicate
that two sequentially or mutually interdependent organizations often employ this kind
of acquisition.
Product Extension While the acquiring and acquired companies are functionally
related in distribution and/or production, but the products sales are not affected by
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each other, this acquisition can be seen as product extension. Such an organizational
combination is usually referred to as concentric diversification (Buono & Bowditch,
2003).
Market Extension When the two organizations produce the same products but sell
them in different geographical markets (Cromley & Green, 1982), this acquisition can
be considered a market extension, which has a fine distinction with product extension
(Buono & Bowditch, 2003). It emphasizes the different market regions.
Unrelated An acquisition is considered to be unrelated when the two constitutionally
unconnected firms are combined (ibid). It also can be named as a conglomerate
acquisition which the aim is to expand products or services range, or diversifying
out of recessionary products and services (Hanson, 1991).
Generally speaking, all the types of acquisition can be referred to by two categories of
motives: financial or value maximizing motives, and managerial or non value
maximizing motives (Napier, 1989). Trautwein (1990) indicates that for the motives
of financial or value maximizing, the main objective is to create value for th e
shareholder. Larsson and Finkelstein (1999) also suggest such sort of motives to be
economic rationality. In addition to the managerial motives, which belong to the
second sort, Larsson and Finkelstein (1999) illustrate that there are two other motives
for the non value maximization, which are named as personal and organizational
motives. Personal motive is in order to augment personal gains for becoming leaders
(Lohrum, 1996) and organizational motive is in order to decrease uncertainty through
controlling resource dependence (cf. Thompson, 1967; Pfeffer, 1972).
3.2 Market integration management of post-acquisition

3.2.1 Macro environment for the market integration
After acquisition, market integration for companies has become significant for their
final success. In order to achieve acquisitions motive, acquiring firms have to
consider the element of international marketing environment. Doole and Lowe (2008)
indicate that the aspects of social/cultural, legal, economic, political and technological
should be considered when the firms enter into international marketing.
The social and cultural factors on the international marketing are huge (Doole &
Lowe, 2008) and difficult to evaluate (Lancaster & Reynolds, 2005). The customers
perceptions and patterns of buying behavior are all affected by different social
conditions, religion and material culture (Doole & Lowe, 2008). Bearnish and
Ashford (2006) indicate that culture differences like religion, languages, education
and symbols are crucial, as all these factors can cause operational problems with the
marketing mix (Bearnish & Ashford, 2006).
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Legal systems will invariably be different in terms of content and interpretation and it
is important for firms to know the legal environment in each of its markets, especially
when firms go abroad (Doole & Lowe, 2008). The domestic laws in the home country,
local domestic laws, international laws, and laws and international marketing activity
are the four key considerations for international law (Bearnish & Ashford, 2006).
One key challenge for the company is to develop an integrated strategy across
numbers of international markets when there are different levels of economic
development, therefore, the international marketer must understand divergent levels
of economic developments and how they impinge on the marketing strategy so that
firms can satisfy market demand as far as possible and compete with firms already in
the market (Doole & Lowe, 2008) and obtain finally benefit.
When the company wants to invest and develop new foreign markets, the political
climate of a country or region is an important factor for the companies to make
international business decision (Ace, 2001). Therefore, when the firm intends to enter
a new market, it must clearly understand the governments attitude to business and
which the government allows the firm to operate (Doole & Lowe, 2008).
Technology is a macro-environmental variable that influences business in
international marketing (Lancaster & Reynolds, 2005). It also affects the development
of products with research (Ibid). The ability to gather a collection of data on markets,
control the management effectively and carry out the business function internationally
are significant in the marketing process, and can be improved with the advancement
of electronic communications (Doole & Lowe, 2008).
3.2.2 Market segmentations

After knowing the macro environment well, it is easier for the acquiring company to
divide the market segments and choose the proper segmentations. Segmentation is a
process involving dividing market into explicit segments, where customers behave in
the same way or have the same demands (Bennett, 1995). For most firms, having
segmentations is a better way to discover potential customers and satisfy their needs
(Market segmentation, 2011).Segmentation based in consumer markets can be divided
into the following categories:
Geographic segmentation is dividing the world into several pieces depending on
geographic variables, is beneficial to all kinds of businesses, because it enables the
marketing team of a company to easily identify and separate the market into different
units, such as region, climate, language, (What Is Geographic Segmentation? 2011) ;
Demographic segmentation is the basic market segmentation with various
measurable factors of population, such as gender, age, career, income, education,
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social class etc., and it is one of the easiest segmentation strategies to u nearth
potential market costumers (Demographic Segmentation, 2011).
Psychographic segmentation is dividing markets depending on the basic psychology
of customers in potential and allows the marketing team to decide how they should
approach customers who come from the same segmentation. Further understanding of
the customers psychology is required when marketing a product, in order to satisfy
customers demands and increase the probability of acceptation of the products, the
whole marketing group will carry out a large amount of activities to understand the
psychology and habits of customers, like interests, attitudes, behavioral patterns, and
lifestyle (Psychographic Segmentation, 2011);
Behavioral segmentation is referred to probability and rate of customer to buy or use
a product. They can be categorized into heavy, medium and light (Lancaster &
Reynolds, 2005; Keegan & Schlegelmilch, 2001).
3.2.3 Market positioning strategy

After the market has been specifically segmented, and some of the segmentations
have been selected, it is essential to find a position in the market (Keegan &
Schlegelmilch, 2001).
A product positioning is determined by the segmentations which company has chosen
(Lancaster & Reynolds, 2005). Positioning is the location of your product in the
mind of your customer (Keegan & Schlegelmilch, 2001, p228). Nevertheless, the
position which a product occupies in the head of a customer counts on the various
variables, which are determined by the marketer (Keegan & Schlegelmilch, 2001).
Developing a positioning strategy is highly relative to the competitors position
(Learn marketing, 2011), because the aim of positioning is to ensure the effect of
coming up the brands of the company from the customers mind instead of its
competitors (Kotler & Armstrong, 2007). Therefore, when concerning making the
positioning strategy from one perspective, the marketing group could make the
position very close to the competitors position, so that customer could have a clearer
comparison when they want to buy the product. From another perspective, they could
also make the position away from the competitors to put forward some advantages
which are superior to the competitors products (Learn marketing, 2011).
3.2.4 Marketing mix

Among the marketing mix, product is the key factor above all, because the market
decision of other elements are mostly dependent on product and the product
positioning strategy (Kashiani & Turpin, 1999).
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Whats more, the marketing mix alters because of its association with the external
environment, where customers live, work and how they make the buying decisions
(Carl & Roger, 1998). For example, if a companys brand varies from domestic to
international, the marketing mix for the brand, which deeply indicates the product or
service, price, promotion and place, will also alter geographically (Keegan &
Schlegelmilch, 2001).
3.2.4.1 Product
Brand, as a part of a product, can be very similar or related between the acquiring and
acquired companies if it is a horizontal acquisition (Vu & Shi & Hanby, 2009). Perrier
(1997) indicated that researches showed that for any organization, the source of
earning comes from basically three types: brand, assets tangible and assets intangible.
What is obvious is, among these, earnings attributed to brand can range from 70% of
the whole market (Lindemann, 2003). Therefore, brand integration of products could
be the most important area to deliberate among all the important post-acquisition
integration factors (Vu & Shi & Hanby, 2009).
Products between the acquiring company and acquired company share something in
common, however gaps of characteristics can be found. Therefore, the integration task
of the newly established company is to fill the gap between the products belonging to
the two companies (Weber & Dholakia, 2000). Tangible product gaps and intangible
product gaps will be discussed.
Tangible product gaps involve the weakness of relative brands in the area of product
dimensions, such as scale, technology, bearing capacity and some physical
characteristics demanded by customers. If the new company after acquisition keeps on
using the separate brands, simply using the acquired companys facility to compete
against the acquiring company product, gaps will produced more or less. If the new
company combines the separated brands into one, then it will produce joint benefits
for the product. Gaps can also emerge in the situation that the acquiring company has
specialized requirements for the producing process or the facility, and nevertheless the
acquired company has limitations of product capacity, the final products produced by
two companies could still have gaps (Weber & Dholakia, 2000). No matter if the
acquisitioned company wants to separate the brands or combine them into one during
the integration, it all depends on the product positioning and its market strategies.
When it comes to the intangible products, it contains relative brand shortcoming in the
areas of service, quality, and aesthetics. If the acquired company has a better service
level than the acquiring company, strategies like moving the process of production to
be more available to customers, making integration of physical distribution, and
training the service personnel in how to deal with specialized customers would
enhance the responsiveness to the customers of the whole company. Moreover, the
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consolidation of service and the scale of the newly built company are in a leaner
relationship. To have expertise from the acquired company can also improve all the
aspects of service (Weber & Dholakia, 2000).
Whats more, despite filling the gaps from the acquired company, the acquiring firm
would still face problems. For example, when entering different countries through
acquisition, they may face the practical problem like cultural difference, such as
people from different countries carry different tastes or habits or buying behaviors.
Therefore, the original product may not be attractive enough to the new market,
differentiating products with new features is required during the integration of
post-acquisition (Haberer, 2008). It may be caused by the status of some products
belonging to the new company, during the saturation and decline stage of the
product life cycle, sales volume of the product declines or stabilizes, profitability
decreases, and it is hard to produce more profits on the same product (Day, 1982).
Under this situation, developing new product will be a new task during the
integration.
During the development of the new product, market analysis is necessary, for its
objective is to understand the product position in the market compared with the
competitors, also to develop the new product characteristics which are connecting
with the needs of potential customers. The technical development of a new product
contains the process of engineering studies of producing the new product, the
establishment of specialized design of new product and specifications and confirming
of the final designs (Swinjk & Song, 2007).
It is manifested by Song et al. (1996) that effective communication and internal
organizational information exchange have become the key points of new product
development integration. Depending on the internal exchanged information about
market orientation and availability of resources, the innovation group in the new
company could make precise decisions during the new product development (Song &
Neeley & Zhao, 1996).
3.2.4.2 Place
In accordance with Lancaster and Reynolds (2005), the place is referred as
distribution, and it is the activity about moving the product from the seller to the buyer.
The distribution can create time utility, place utility, possession utility and form utility,
and it is a structure through which transactions are made so that the products can be
delivered to final users, it also wants to ascertain what are the customer requires and
ensure they get satisfying products, the company must move its products through the
distributive system (Lancaster & Reynolds, 2005). Certainly, in order to fulfill
consumers needs, consideration of the financial cost is necessary (Doyle, 2002).
A regional approach is usually used for estimating the distribution gap (Weber &
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Dholakia, 2000). Meanwhile, Weber and Dholakia (2000) indicate that in the different
regions of the country, the combined firm should achieve good distribution in all
regions although each firm has the different superiority of distribution. Therefore, if
the acquiring firm wants to obtain the synergistic benefits from distribution, it must
utilize and employ the strength from the acquired firm (Weber & Dholakia, 2000).
3.2.4.3 Price
Factors like how the competitors devise their prices, cost of production, cost of
channel distribution and the acquiring companys objective will deeply influence the
decision how to make the price appropriate (Haberer, 2008).When it comes to the
setting of the price, the vital approach is research of the market: what the standard of
paying is and what the capacity for customers to pay is (Haberer, 2008).
Concerning the price gap between acquiring company and acquired company, if the
acquired company has segmentation with a low market price, and the acquiring
company wants to therefore open the new market with low position, there is no need
for the new company to change the price. Moreover, joining with two companies, the
competitiveness of price of the newly built company may be influenced in various
ways (Weber & Dholakia, 2000).
3.2.4.4 Promotion
In accordance with the type of product, as an element of the marketing mix,
promotion is subject to much variation (Lancaster & Reynolds, 2005). They also
indicate that promotion receives much attention as a marketing function, since
promotion usually has the highest budget allocation of all marketing mix elements in
consumer markets, particularly after the product has been launched. Haberer (2008)
suggest that the term promotion encompasses four traditional tools, such as
advertising, personal selling, sales promotion and public relations (Kashani & Turpin,
1999). Each activity should be used by the company to communicate customer value
convincingly and build customer relationships (Kotler & Armstrong, 2008).
Advertising is the function under focus in the economic effects volume (Borden, 1984)
which includes different forms of presentation without personal and promotion of
ideas, goods or services by an identified sponsor (Kotler & Armstrong, 2008).
Through different forms of media, such as advertising covers billboards, magazines,
newspapers, radio and television, advertisements can help companies reach a lot of
consumers simultaneously and convey diversity regarding messages (Kashani &
Turpin, 1999).
According to Hopkins (1987), high advertising costs can promote an acquiring firms
entry into the new market. When the acquiring company wants to present its new
13
products in the new market, since advertising can let it repeat a message many times
and let people understand the product they wish to purchase, the company always
employs this means to enter the market (Kotler & Armstrong, 1994).
Personal selling is the most effective tool of the buying process (Kotler & Armstrong,
1994) by the firms sales, and its purpose is to make sales and build customer
relationships (Kotler & Armstrong, 2008). Through personal selling, the sales can
observe the customers needs and characteristics to make adjustments quickly, a nd a
long-term relationship can be built (Kotler & Armstrong, 1994). However, it can also
be expensive for the sales salaries (Lancaster & Reynolds, 2005). Therefore, when
the acquiring company integrates the employees of the acquired company, how to
utilize the employees whom have compact relationships with markets is crucial
(Daniel & Metcalf, 2001).
Sales promotion involves various tools like temporary price reductions, displays,
coupons, in-short demonstrations and free samples and so on (Lancaster & Reynolds,
2005). All these means of sales promotions aim to attract consumers attention and
provide information of their products that may lead to purchase. Compared with the
advertising, sales promotion can gain a stronger and quicker response from consumers,
although the effects of it are usually short-lived (Kotler & Armstrong, 1994). Weber
and Dholakia (2000) illustrate that while the acquisition wants to enhance marketing
effectiveness, the sales promotion efforts may help the firm achieve synergistic
benefits.
Public relations is a major mass-promotion tool whose purpose is to set up good
relationships between the different companys public, by achieving favorable publicity,
setting up a good corporate image to the market and dealing with or heading off
adverse rumors, stories, and events (Kotler & Armstrong, 2008). When the consumers
avoid salespeople and advertisements, the message of the products may get to the
buyers as news through the means of public relations (Kotler & Armstrong, 1994).
Post-acquisition integration may cause many unforeseen problems like the
downsizing (Lohrum, 1996) and influence the corporation image and finally affect
product sales.
Generally speaking, acquiring firms and acquired firms have different means for
promotion tools. The acquisition will enable the acquiring firm to consolidate
promotion efforts for the brands of the acquired firm, if any brands are consolidated,
more promotional resources will be useful for the rest brands, and the sales will be
enhanced as well (Weber & Dholakia, 2000). Therefore, combining the best
promotion tools from acquired firms can create a better benefit.
14
4 METHODOLOGY
In this chapter, we will explore what approach of research is used. The case
study with the case collection, data collection and case analysis will also be
presented for the purpose of this study. Meanwhile, in order to reveal the
quality of this qualitative research, reliability and validity of this study will be
presented.
4.1 Research approach

Bryman and Bell (2007) indicate that quantitative and qualitative research are the two
types of research strategy. Quantitative research is used to collect data concerned with
numbers and figures to investigate the extent of behavior or attitude (Jonsson & Hgg,
2009) while qualitative research enables the researcher to study selected issues like
social behaviors in depth and detail (Patton, 2001). According to Bryman and Bell
(2007), qualitative research normally emphasizes words rather than quantification in
the collection and datas analysis. It mainly emphasizes an inductive approach and be
employed to create the theory (Bryman & Bell, 2007). Simultaneously, its
epistemological orientation is interpretivism, and the ontological orientation of
qualitative research is constructionism that embodies a social realitys point as a
constantly shifting emergent property of individuals creation (Ibid).
In this study, the authors need to exploit successful management of market while
companies are executing post-acquisition integration, since there are several ways for
managing the market integration. In order to achieve this purpose, the management of
market integration is required to analyze in a deep and detailed manner. Analysis with
words can help authors explain the ways of management in depth. In view of all these,
qualitative research is suitable for this study.
Besides, inductive theory which is characterized by empirical data collected and lead
theorys generation (Bryman & Bell, 2007) is employed in this study.
4.2 Case study

According to Cassell and Symon (2005), the case study research is widely used in
organizational studies and across the social sciences, like organizational psychology,
employment relations, political science and so on. Cassell and Symon (2005) also
illuminate the case study consists of a detailed investigation which is often the case
with data collected over a period of time of phenomena, within their context. The
purpose of it is to provide the context and processes analysis which clarify the
theoretical problems being studied. When the researchers objective is to elucidate the
15
case thoroughly and the case is an aim of interest in its own right, the case study is
useful (Bryman & Bell, 2007). Furthermore, Yin (1994) states that the case studies
can answer question such as how and why.
As to this research, we want to get an in-depth comprehension of the
internationalization of firms through acquisition. The success of acquisition is a
phenomenon in acquisition, therefore, the context of the companies how they manage
the market integration are required. In addition, the research question in this study is
characterized by how. Therefore, a case study approach is deemed appropriate.
4.2.1 Case selection

In accordance with Blaxter, Hughes and Tight (2001), when the most convenient
sample is selected, it is named as a convenient case selection. While the researcher
has knowledge of what they are going to investigate, the most valuable information
can be selected by the researchers, this situation is a subjective case selection
(Denscombe, 2000). Based on the objective of this study, the above two means of case
selections are used to search the related cases. Through consulting a mass of resources
from internet and connecting with the company and with our friend who is working in
the company which we want to research, we eventually choose a company which
comes from America and which has acquired Chinese companies to develop the
Chinese market. As a case of this research, it is one of the largest food companies in
the world and acquisition in its history is quite abundant. Concurrently, some of the
acquisitions of this company affect the Chinese market directly, we also can get more
information from China. Hence we have chosen this company in the Chinese market
as our case study. As the company does not want its name to be shown in this thesis,
we use Company A to replace it and Company B to replace the acquired
company.
4.2.2 Data collection

Lewis (2003) states that there are two types of data, they are primary and secondary
data. We searched information from companys websites, company annual reports and
the publication in order to collect a huge number of secondary data. These are all the
documents which cover the different sources widely. Bryman and Bell (2007)
illustrate that organizational documents can provide valuable company background
information to the research, simultaneously, in the case study research, documents can
be used for describing the firm and its history since documents can offer at least
partial insights into past managerial decisions and actions, they can also be useful in
building up a timeline, particularly in processual studies of organizational change
(pp. 566). Besides, four criteria for evaluating the quality of documents such as
authenticity, credibility, representativeness and meaning are required for this
secondary data (Bryman & Bell, 2007).
16
Although the secondary data is quite useful for our research, Andersson and Wictor
(2003) stress that using secondary data only is not enough to understand the research
study in depth. Bryman and Bell (2007) indicate that the semi-structured interview is
one of the major types in qualitative interviewing but also can be replied in whatever
manner the interviewee wants. According to Bryman and Bell (2007), researchers
have a certain amount of room to ask further questions based on the context of the
conversations when they use semi-structured interview. In this case study, in order to
gain much more related information about the acquisition and ensure the resources
reliability and validity, we connected the CEO of Company A China-Ms Dai through
our friend, since she knew the whole integration process of Company A. Because Ms
Dai was quite busy for business, she could accept our interview by e-mails instead of
a face to face interview. So we designed a semi-structured interview guide with open
questions with loosely specified areas of interest (the information about the
companys acquisition and post-acquisition integration, and its basic information), and
sent it to Ms Dai by e-mail, she replied to us in detail and supply several other
information which we never thought before. After Ms Dais reply, we found several
new questions and sent them to Ms Dai again, she also replied to us in detail. Through
such communication with Ms Dai by e-mails several times, we got a lot of useful and
detailed resources for our thesis eventually, the interview guide in appendix was also
adjusted after we communicated with Ms Dai.
4.2.3 Case analysis

Since the data of qualitative research from semi-structured interview transcripts or
documents are characterized as large, cumbersome, and not straightforward to analyze,
it is important to avoid failing to carry out true words (Bryman & Bell, 2007).
Yin (1994) indicates that there are three strategies to analyze the case. Proposition
strategy is always used when researchers have to answer how and why. The
explanatory strategy is used when the researchers know the research question and
problem related to this question very well. (Saeed & Arshad, 2007). The descriptive
frameworks purpose is to organize a case study (Yin, 1994).
In this case study, we use the proposition strategy which is relying on theoretical
proposition where secondary data should be compared with primary data (Yin, 1994).
We also analyze the empirical data with the help of theoretical frameworks.
4.3 Reliability and validity

Patton (2001) states that while the researchers are designing a study, analyzing results
and judging the studys quality in the qualitative research, they should consider the
factors of reliability and validity. While the qualitative study has the purpose of
17
generating understanding, reliability is crucial for a good quality research

(Golafshani, 2003) which refers to measure a concepts consistency (Breman & Bell,
2007). Validity refers to measure the authenticity of the observation, identifying or
what the researchers say they are (Ibid), it is influenced by the researchers
perspectives of validity in the qualitative research and their options of paradigm
assumptions (Creswell & Miller, 2000). Generally speaking, in the qualitative
paradigm, reliability and validity are conceptualized as trustworthiness, rigor and
quality (Golafshani, 2003).
In order to achieve the reliability and validity in this research study, we select a huge
number of primary and secondary data from Chinese, so that we can understand what
the companys operation philosophy is precisely. The CEO of company A also replied
us detailed questions from semi-structured interview guide, almost of the replies are
concerning to our topic, therefore, it helped us research this study.
18
5 EMPIRICAL DATA
In this chapter, the information for empirical data will be collected by both
Internet and interview. Empirical data about company background, motivation
for acquisition, marketing macro-environment, market segmentation and
product positioning, and marking mix integration will be clarified.
5.1 Company brief Background

Company A is a leading food company in North America, with 117000 employees, 6
global research and development centers, and several rational research and
development centers, which cover t he areas of categories: confectionery, biscuits,
beverages, cheese, convenient meals and grocery. It processes two major operating
units: Company A - North America, and Company A International. The products of
Company A are produced by more than 220 manufacturing facilities and sold in more
than 155 countries. To hold the slogan of To help make food a simpler, easier, more
enjoyable part of life, Company A has become a company which is famous for
hundreds of years (References for business, 2011).
In 2007, Nov. 30 th, Company A announced the accomplishment of acquisition for the
global biscuits industry from Company B. The acquisition project cost 53 billion euro
and was involved in more than 20 countries, and entailed 32 factories, operating
organizations, capitals and all the leading biscuits brands from Company B. For the
Chinese market, it took 2 years to integrate the markets, and in 2010 the integration
was finished (References for business, 2011).
Company A China, one subsidiary of Company A International in the developing
countries, which was established in 1984, now with 4000 employees, operating in the
areas of categories of biscuits, coffeeconfectionery and powdered beverage. After the
integration, the companys headquarter has moved from Beijing to Shanghai in 2008,
with offices now set up in more than 250 cities in China. It is equipped with factories
in Beijing, Shanghai, Guangzhou, Suzhou, Zhujiang and elsewhere. In the year 2009,
the Asia Pacific research and development center was built in Suzhou (References for
business, 2011).

An interview was conducted with the CEO of Company A China, Ms Dai, about the
reason of choosing acquisition strategy as their strategy. As explained by her,
Company As world market has been separated into three parts: North American
19
markets, European markets and developing markets. Among all of these (as can be
seen in Figure 1), half of the business is outside the headquarters in North America,
28% of the business is in developing countries and 23 % in European markets (2010
face sheet, 2010, p.2). Therefore, to gain the markets globally and to expand the
market shares in the world, Ms Dai mentioned acquisition is the quickest way to enter
the global markets as a step for their internationalization.
Figure 1(2010 face sheet, 2010, p.2)

Ms Dai explained that the reason for choosing Company B and the reason for the
choice of the biscuit industry can be somehow connected. Because Company As
biscuit markets has now occupied 22% of the whole markets (can be seen in Figure 2),
it shows a great growing tendency (2010 face sheet, 2010, p.2). On the other hand, the
biscuit market of Company B has also occupied large parts of the whole global market,
which closely followed Company As market position. She indicated, the acquisition
of Company Bs biscuit industry can not only enable the jumping into the No.1
position of the Chinese biscuit market because of defeating the biggest competitor, but
can also utilize all the manufacturing factories, all the available distribution channels
and the whole leading brands loyalty from Company B to develop further and more
quickly. Also, more importantly, the acquisition of Company B enables Company As
international business to become the most vital donator for the whole global revenue
of Company A. Ms Dai continued to explain, the global biscuits business has doubled
from that which it used to be and occupied 20% of the whole products of Company A,
which has become the biggest business Company A operates.
20
Figure 2 (2010 face sheet, 2010, p.2)

The CEO of Company A China mentioned that Company A attaches importance to
the Chinese market and invests a huge amount of capital in China. They make great
efforts to adapt to the macro environment in China.
In the respect of social and cultural aspects and attitudes, in accordance with different
tastes in China and America, Company A decreased the sugar content of the Biscuit A,
and because of these measures, in 2009, biscuit As amount of consumption increased
by 41.9%. Therefore, Company A realized the customer demanded further changes.
After acquiring the Company B, on the basis of consumers taste, Company A kept
the brands which have good sales and eliminated several products of sub-brand for
which sales were not great. But the CEO of Company A China also indicates that
different regions in China are keen of different taste and the specification of
packaging. For instance, Biscuit B is popular in Beijing but not popular in Guangzhou,
so they put Biscuit B in Beijings supermarket much more than Guangzhous. Besides,
a majority of customers in Shanghai prefer the big size of packaging, but the
customers in Beijing usually prefer a small one.
With regards to legal aspects, there are a lot of by-laws regarding food companies in
China, like Food Sanitation Law, Product Quality Law and so on. Company A set up a
special department by the top managers in the company, named as the committee of
Global Corporate Responsibility, and its responsibility is to pay close attention to the
agricultural supply base, and the quality and safety of products.
21
In economic aspect, with the development of the economy and peoples living
standard, the eating habits and diet of consumers in China have changed a lot, as the
demands for convenience food are growing rapidly. In 2008, the influences of
American subprime crisis lead to the worldwide financial crisis, but in the Chinese
market, there was little impact to Company A. Its sales were increased by 12% in the
Chinese market.
In political aspect, the sustainable development has become an important topic for the
Chinese government and the protection of environment has been stressed particularly.
As the resource from Company A indicates, they do several changes in order to
achieve energy saving and environmental protection. From 2006 to 2008, Company A
decreased nearly 120 million liters of water in the production processes, which could
fill 5000 standard swimming pools. Meanwhile, Company A also takes measures to
decrease energy consumption by 17% during the production process.
In technology aspect, Company A established the largest biscuit research and
development center of Asia in Suzhou to research and develop new products for local
demands. The recipes have appeared first in the Chinese market which can suggest
some collocation with different biscuits.

According to Ms Dai, there are various exiting types of segmentations in the market,
people who want to find healthy and nutrition through the biscuits will be classified
into one segment. Such as people who will eat biscuits for breakfast because they
think it is healthy, usually this type of segmentation is belonging to the low and
medium positioning; on the other hand, people who look for entertainment when they
eat biscuits will be sorted into another segmentation, which the positioning is more
higher. From another point of view, biscuits can also be sorted by types which are
especially suitable for children and old people, such as those with more calcium to
promote the growing of children, and to assist old people to become healthier hale and
hearty.
Another example might be a type for adults, maybe with chocolates inside, which
provide more energy whilst they are working without time for lunch. Moreover, it can
also be sorted by people who are busy, like those who have no time for meals,
therefore they have to take food which can be consumed quickly, like biscuits.
Usually this kind of biscuit will be full of calories to supply the energy quickly. Also,
there are people who have leisure time and just want to enjoy life and eat desserts
such as biscuits, therefore this kind of biscuits will both be emphasized by shape and
taste.
22

Ms Dai stated that according to the segmentation they had already divided and
targeted, positioning of the products showed up clearly. For example, they target the
products in the segmentation of health and nutrition, resource of elements in this kind
of biscuit cost very little, therefore, when it comes to a low price, the product
positioning will be low. However, if the competitors follow the steps of this type of
product, but with some innovated features, the positioning of this kind of product will
rise. To compete in the market with full advantages, Company A wants to occupy all
levels of positioning in the Chinese biscuit markets.
Originally, the products of Company A have already reached the high and medium
level of positioning, and Company A wants to expand the market with low positioning
through the acquisition by utilizing the products of Company B. Therefore, all level of
positioning will be covered.
5.3.4 Marketing mix

5.3.4.1 Product and price
Statistics from table 1 can show that after the integration of Company B, all the
products from these two companies will compensate for each others market gaps.
What is more, the price and the position of the products from Company A and
Company B are quite different for they are both aimed at different markets, which can
be shown in Table 1.
Products of
Company A
Price/
Positioning
Logo
Products of
Company B
Price /
Positioning
Logo
Product A
Product B
Product C
Product D
Product E
5kr/high
3.5kr/high
2kr/medium
2.5kr/medium
3.5kr/high
Company A
Company A
Company A
Company A
Company A
Product I
Product II
Product III
Product IV
Product V
1.5kr/low
2.5kr/medium
1.5kr/low
1.5kr/ low
1kr/low
Company B
Company B
Company B
Company B
Company B
Table 1 before the integration (The figures of the price were provided by Ms Dai, and the
units for Chinese money have been equally transferred to Swedish Kronor.)
Ms Dai mentioned one of the goals to acquire Company B is that they have the
products in the second and third line markets, and it is a good chance to expand to
all the cities in China, because for the company itself had occupied most of the
first-line cities in China. Therefore, after the acquisition, Company A wants to further
all the market positioning of the biscuits markets. Meanwhile, they tended to
23
gradually change the company logo for the products from Company B in the
following time. Ms Dai stated that it is not wise to change the logo of Company B
immediately, because the products of Company B still obtain a large number of
populations in the second and third-line markets. They need time for all the customers
to adjust and accept the changes, during the time, both logos of Company A and
Company B will appear on the packages of these products, which can be seen in Table
2 in the red area. It was mentioned by Ms Dai that most of the products will be kept
except one exception, because the positioning for this product is too low, therefore, it
cannot survive during the integration, which can be seen in the last line of the Table 2.
Products of Company A
Price/ Positioning
Logo
Product A
Product B
Product C
Product D
Product E
Product I
Product II
Product III
Product IV
Product V
Product F
5kr/high
3.5kr/high
2kr/medium
2.5kr/medium
3.5kr/high
1.5kr/low
2.5kr/medium
1.5kr/low
1.5kr/ low
\
4kr/high
Company A
Company A
Company A
Company A
Company A
Company A/B
Company A/B
Company A/B
Company A/B
\
Company A
Table 2 during the integration (The figures of the price were provided by Ms Dai, and the
Whats more, Ms Dai stated that it is still necessary to have an innovation of new
product for the new market. Since Feb. 2 nd of 2010, Company A announced the new
Product F (seen in Table 2) has faced the world, which contains Germ,
Endosperm and Branwith the aim of swapping all the cluttering grains markets to
create a completely Chinese style of biscuit. Its price has been set at 4kr, which is also
at the level of high positioning. It is the first grain biscuit entirely suitable for Chinese
peoples stomachs, because before this time, germ is usually a very unstable
resource for company to create and conserve. Company A with its special stable
germ technique solved the problem in the end. This is a big step for Company A,
because although the tastes of grain biscuits are less tasty, they still have a large
amount of potential markets for people who care for their health, for people who gain
diabetes or for someone who wants to lose weight. Additionally, before this
innovation, there is no clear clarification about how much amount of the grains
should be put in the biscuit, the market was in a mess. Ms Dai told us there is
potential rule that companies in the first - line set the rules for the industry, and
companies in second and third - line will follow the steps. Therefore, the innovation
not only gives the whole industry a clear standard, but also consolidates its leading
companys position in the biscuit industry.
24
Products of Company A
Price/
Positioning
Product I Product IIIProduct IV

Product CProduct DProduct II
Product AProduct BProduct EProduct F
1-1.5kr/low
2-3kr/medium
3-5kr/high
Logo
Company A
Company A
Company A
Table 3 after the integration (The figures of the price were provided by Ms Dai, and the
We can see from Table 3 that, after the integration all the products have found their
positioning, products originally from Company A will continuously focus on the
medium and high positioning. Furthermore, since logos of Company A and Company
B have all changed into Company As logo, the products will all follow the steps of
Company As positioning strategy (Seen in Table 3). However, Ms Dai explained
although all the brands have worn the clothes of Company A, which means the
products will carry the Company As style, but still the products originally from
Company B will keep on as they currently are. There is no plan to change them.
5.3.4.2 Place
Once the Company A integrated the Company B about the place, it can be divided into
three parts, Ms Dai said.
The first one is purchasing, since for the biscuit companies, the fundamental raw
materials are the same. Generally speaking, for instance, Product D and Product III
are two products that belong to Company A and Company B separately, when the
sales are large enough, the purchasing can be conducted together. So that it must
decrease the cost of raw materials and also accelerate the production process.
Therefore, when the two companies combined, the two managers of purchasing from
Company A and Company B communicate together for the purchasing.
According to Ms Dai, the integration of factories is significant for Company A.
Before Company A acquired Company B, Company A owned four factories in Beijing,
Tianjin, Suzhou and Guangzhou, of which, the two factories which were located at
Beijing and Suzhou are producing biscuits. On the other hand, Company B owned
three biscuits factories which were located at Shanghai, Suzhou and Jiangmen
respectively. Besides, Company B also had a sales company in Shanghai. In 2008,
during the integration of Company B, Company A took over all the factories from
Company B and maintained its own factories as well as. Ms Dai also indicated that
through the integration of factories, these factories can study some advantages from
each other. For Company A, the high costs are a problem, and Company B can
provide several experiences like producing and transporting to decrease the costs. As
Company As technology is better than Company Bs, it can be employed to the
25
Company B factories like the packing, since Company B cannot pack the biscuits
tight enough so that the biscuits may break during the transportations.
In 2009, after integrating the factories of Company B, Company A became the largest
biscuit manufacturer, meanwhile, Company A set up the biggest biscuit research and
development center of Asia, costing 2 billion dollars, in Suzhou, China. Currently, in
the Australian, New Zealand, Korean and Southeast Asian markets, all of the biscuits
of Company A are coming from China, and the special Muslim cookies for Jordan,
Pakistan and other Islamic countries are also supplied with the biscuit base in China,
it means that China becomes the worlds biscuit factory.
Meanwhile, they constitute a distribution group with 12 persons, and the number is
equal from Company A and Company B, and the headquarters of Company A moved
from Beijing to Shanghai.
The integration of distribution channels is also stressed by Ms Dai. Actually, in
Company A, the biscuits sales channels were not so strong. Since the position is high
relatively, Company As biscuits only entered into the first-tier cities like Beijing,
Shanghai and so on and the majority of products can only spread in stores and
supermarkets.
On the contrary, since 1992, Company B has occupied the East China market, its
products have seeped into the second and third-tier cities. According to the research,
the traditional channel still occupied the marketing sales more than 50% in China
mainland, Ms Dai thought the development of traditional channel can help Company
A sells its products in the cities deeply.
Through the integration of Company Bs distribution channel, Company A owns the
whole market channels in China. Ms Dai indicated that currently, the Chinese market
has been divided into three parts, big stores and supermarkets, small and median
stores and supermarkets, and retail stores. The customers of big stores and
supermarkets in the North of China are responsible by their own direct sales force,
and in the South of China, the salesmen from factories and the agents develop the big
stores and supermarkets together. For the small and median stores and supermarkets
and retail stores, they are responsible by the wholesalers in each area.
5.3.4.3 Promotion
In 2009, the strategy of advertisement of Company A has adjusted significantly, Ms
Dai indicated that Company A increased the investment in advertisement during the
integration of Company B. They expected that the new company can strengthen the
different brands communication with consumers in order to increase popularity and
reputation.
26
Since the coverage, rates and ratings of China Central Television (CCTV) are the best
in China, Company A selected CCTV in China as their advertising platform, and
finally chose a programTopics in Focus, which has a quite high audience ratings
and is also trusted and respected by the national audience. Ms Dai stressed that from
Key Performance Indication and the arrival rate of data, investment in large
advertisements has achieved their desired objectives, and more customers realize the
new products in Company A.
In the second and third-tier cities, Company B always assigned their factories staffs
to promote their products, during the post-acquisition integration, Company A
integrated this distribution and also constituted the distribution team as we mentioned
before. Company A decided to employ all the employees in Company Bs factories
and took advantage of their experience to sell products.
27
6 ANALYSIS
In this chapter, we will analyze different aspects according to the theoretical
framework and empirical data, and each aspect we mentioned in the
theoretical framework and empirical data will be discussed for the purpose of
this thesis

According to Hanson (1991) and Brozen (1982), when a company wants to increase
market share in the new markets with existing product ranges, the type of the
acquisition is referred to horizontal acquisition. As we can find in Figure 1, Company
As main business is in North America, but only 28% in developing markets.
Meanwhile, the biscuit is one of the most important businesses for Company A and
China is a huge market that they want to occupy. In order to enhance the market share
in developing markets and achieve the internationalization finally, Company A
acquired Company Bs biscuit business which also occupied large parts of the whole
global market, especially in the Chinese market. After acquiring the biggest
competitor in China, Company A can develop the market shares in China much more
easily and quickly, and increase the market shares in developing countries to
ultimately implement internationalization. It means that Company As acquisition is a
horizontal acquisition.
Simultaneously, while the Company A increases the market shares and achieves
internationalization, although it takes over Company Bs factories and employees, its
final goal is to enhance the revenues in the global markets through the biscuit business.
Therefore, Company As acquisitions motive is a financial one or value maximizing
motives (Napier, 1989), their principal objective is to create value for the shareholder
(Trautwein, 1990).

Doole and Lowe (2008) indicate that different social conditions, religion and material
culture may affect customers perceptions and patterns of buying behavior. Company
A realized this and adjusted the taste of sugar content of the Biscuit A, since the
Chinese prefer less sugar than the American market. Even in China, the demand for
taste and the specification of packaging are disparate in the different regions.
Consequently, according to the different demands in Chinese, during the integration,
Company A keeps several popular brands and obsoletes some unpopular products in
28
China, meanwhile, according to the different sales volume in different regions,

Company A increases or decreases the shelf area for distinct brands in different
regions. Although Company A was conscious of the different demands for packaging,
they have not adjusted the size of packaging.
When a company is developing the international business, the different laws in th e
international marketing must be complied with (Doole & Lowe, 2008). In China,
Food Sanitation Law, Product Quality Law and such legal items are used for the food
companies and the quality and safety of food is attended to especially. The special
apartment named as the committee of Global Corporate Responsibility in Company A
is in charge of the products quality and safety and the agricultural supply base both
from Company A and Company B, this can guarantee their products correspond with
Chinas standards.
Doole and Lowe (2008) point out that in order to satisfy the market demands and
finally obtain benefit, the company must realize international markets different
economic developments levels and how they influence on the marketing strategy. In
China, the demands of convenience food are increasing quickly because of the
development of the economy and peoples living standards. Company A seized this
opportunity and acquired their biggest competitor in China, therefore, Company A
enhanced 12% of their sales in 2008 although the American subprime crisis impacted
the global economic environment.
The governments attitude influences the companys operation directly (Doole &
Lowe, 2008) and the company should make different business decisions when they
enter in the different market according to the local political climate (Ace, 2001).
Company A catered to the environment protection political of Chinese government,
they decrease water use and energy consumption during the production to achieve
sustainable development. This way of operation is encouraged by the Chinese
government, so Company A can develop their business in China smoothly.
The ability to research and develop the products is important for the companies to do
business in international markets (Lancaster & Reynolds, 2005). The biscuits research
and development center of Asias establishment can improve Company A research and
aid the development of new products for local demands and also research products for
other foreign markets. The development of delicious recipes for different biscuits
from Company A can also affect the sale proportion.

From the empirical data, we can find that segmentations of Company A are divided
according to the regulations of psychological segmentations, therefore the Chinese
biscuit market can be divided by consumers who pay attention to healthy and
nutrition, taste and shape, calories content, or convenience.
29
In order to understand the customers demand, basic psychology like interests,

attitude and lifestyles will be discussed to find the rules of categories. First of all, not
all the people like to eat biscuits, because they regard biscuits as a food lacking in
nutrition, therefore they never or seldom eat biscuits, once they choose biscuits, most
of times they will pay attention to the health and nutrition content. Also, there are
people who like to eat biscuits, however the only standard for they to select is health
or nutrition, for example, people who want to lose weight or people who gain diabetes,
and they have to choose lower sugar content biscuits in order to keep healthy.
Secondly, according to different peoples lifestyles, those who do not have enough
time for meals will both care for calories content and convenience when choosing
biscuits. As Ms Dai mentioned in the interview, high calories will easily supply the
energy they want, plastic packaging will provide great convenience for people to carry.
For example, in the high rapid of the society, office workers usually have no time for
lunch, they will prefer biscuits with high calories to support them; on the other hand,
for teenager students who are in the growing stages, sufficient breakfast will be an
important part in ones life, therefore, they will also be fond of high calorie and
convenient biscuits.
Furthermore, for people who have strong interests in eating biscuits, usually this kind
of people will sometimes look for leisure time to have fun with friends, like a picnic,
or an afternoon tea. Under these situations, taste and shape become a very important
element when choosing biscuits, because they treat biscuit as more like a dessert than
as food for meals.

From the theories, we realized that positioning is the location of your product in the
mind of customers (Keegan & Schlegelmilch, 2001, p228), it is very important to set
a proper positioning for a company, because this is how customers think of you when
mention the name of the company or any brand of the company. Developing a
positioning strategy is highly relevant to the competitors positioning (Learn
marketing, 2011), according to the positioning strategy theories, there are two choices
of setting the positioning: one is to occupy the positioning very close to the
competitors positioning, to let the customers themselves choose which brand is better.
The other is to make an obvious contrary to the positioning of them, so that to
emphasize the strengths of the acquiring company it to attract customers.
We can find in the empirical data that Company A has already occupied the high and
medium positioning of the Chinese biscuits market, most of its competitors occupied
the low and medium positioning. For Company A, it not only sets the positioning
close to the competitor who has already occupied the high level of positioning, but
30
also occupies the low and medium market positioning to make they own strength of
characteristics through the acquisition of its biggest competitor. As a conclusion, after
the integration, Company A is aimed at all levels of positioning to expand its own
products in the Chinese biscuits markets.
6.2.4 Marketing mix

6.2.4.1 Product
Products between the acquiring and acquired companies share something in common,
however they have different gaps because of the different characteristics of the
products (Weber & Dholakia, 2000). Thus, Company A and Company B are large
companies in the industry of biscuits, they have the same aim to occupy the biggest
Chinese biscuit markets, however, the products of these two companies differ from
different orientations. Products from Company A are mostly focused on the high and
medium positioning of markets, meanwhile products from Company B pay more
attentions to low and medium market positioning (see figures in Table 1).
Therefore, the integration task of the acquiring company is to fill the gaps between
two products from two companies (Weber & Dholakia, 2000). Generally speaking,
products contain tangible products like real materials and intangible products like
service, biscuits here belong to tangible products. We have already known from the
theoretical framework part, that tangible products gaps involves the area of scale,
technology, bearing capacity and some physical characteristics demanded by
customers (Weber & Dholakia, 2000). If the acquiring company wants to keep on
using separate brands, there will be gaps in quality between the two areas of brands if
using the same facilities from the acquired company. However, according to the
interview from Ms Dai, the CEO of Company A, we realized that Company A wants
to occupy all levels of positioning in the Chinese biscuits markets, therefore, after the
integration, the products they produce will reach different levels of positioning in the
market, and the gaps between different products can just right make up the various
markets demands. For Company A, the integration is a large activity for the different
products to compensate each others market positioning.
To speak of, since Company A wants to further all the market positioning of the
biscuits market, we realize a problem in Table 1, that logos from the acquiring and
acquired companies present huge diversities. Considering the high brand loyalty
which Company B contains because of the special physical characteristics (Weber &
Dholakia, 2000) of products which meet customers demands in second and third-line
markets, it is better to fill the logo gaps gradually through the integration. Therefore,
from the red areas in Table 2, we realize the change of the logos. During the
integration, Company A changes the logos of products originally from Company B
into logos both of Company A and Company B. It is a strategy not only to appear to
31
customers who are fond of products from Company B to notice the changes, but also
let all the customers know these popular brands are now belonging to Company A, it
is a time for them to accept and adjust.
However as mentioned by Ms Dai, even in the end, logo of Company B will all be
replaced by Company A, products originally from Company B will continue as they
are in the low and medium positioning so that Company A could cover the markets in
the second and third- line markets. Therefore, they realize the new positioning
strategy of covering all the Chinese biscuits markets through integration.
Since we have already discussed above, the positioning of Company A is to occupy all
the Chinese biscuits markets, the company should adjust the products from two
companies. Markets whose products have entered the saturation and decline stage
are better to be abandoned (Day, 1982), and it shows up a new task to develop new
products. As can be seen in Table 2, product V originally from company B has already
been put away, product F has been innovated.
Developing new products should properly analyze the market, for its objective is to
find the new products positioning in the market comparing with the competitors, also
to develop the new product characteristics which are connecting with the needs of
potential customers (Swinjk & Song, 2007). As discussed in the empirical data, the
new product, product F is aimed at the products composed ofGerm, Endosperm and
Bran, with motivation to swap all the cluttering grains markets to create a completely
Chinese style of biscuit in the whole grain biscuits market. Obviously, according to
the markets situations, before Company As big step of producing the new grain
biscuits, there are different kinds of standards of grains content, since Company As
special stable germ technique, it sets the standard of the whole industry, and let the
competitors in the second and third-line know the new products positioning is high
and confirms Company As leading position further.
6.2.4.2 Place
As we can see through empirical data, the integration of place of Company A and
Company B can be divided into three parts. The integration of purchasing can create
time utility, place utility and possession utility. For Company A, after acquiring
Company B, purchasing same raw materials for different products of biscuits can not
only save the cost of raw materials but also save time to deliver the raw materials to
accelerate the production process. Meanwhile, the uniform purchasing will help
company manage the quality of raw materials, and ensure the customers get the
satisfy products finally (Lancaster & Reynolds, 2005). Company A can also utilize
Company Bs channel of purchasing, the cost, and the quality and so on can be
compared and choose the better one for Company A, it also has synergistic benefits
for acquiring the firm (Weber & Dholakia, 2000).
32
After Company A integrated the factories of Company B, they utilized and employed
the strengths from the acquired firm (Weber & Dholakia, 2000), Company A realized
that the integration of all the factories enabled the company to increase the capability
of biscuit production, so they maintained all the factories and set up the biggest
biscuit research and development center of Asia in Suzhou, it made them become the
largest biscuit manufacturer in the world. Simultaneously, after the integration, all the
factories from Company A and Company B studied each others strengths. The high
technology for the packing from Company A is used in the original factories of
Company B, and the experiences of decreasing the costs from Company B are also
shared to Company A, it achieved the synergistic benefits for the final firm. Through
this integration, Company A can both save costs and improve the quality for all
products. Furthermore, after integrating Company Bs factories, since the factories
locations are enlarged, products can be delivered from the nearest location, and
customers requires will be satisfied as soon as possible (Lancaster & Reynolds,
2005).
When the distribution gap is estimated, the regional approach is usually used
(Weber & Dholakia, 2000). In China, Company As superiority is in the first-tier cities
like Beijing and Shanghai, but the Company Bs superiority is in the second and
third-tier cities and the majority of the East China market. Weber and Dholakia (2000)
indicate that although different firms have different superiority of the distribution, the
combined firm should achieve good distribution in all regions of the country.
Therefore, after acquiring Company B, Company A can occupy the second and
third-tier cities quickly and expediently, so that Company A can own all the market
channels in China. Meanwhile, since Company A constituted a distribution group and
the members come from two companies equally, these members are acquainted with
the distribution channels of their companies, and combining them enables the
distribution channels to operate at optimal levels, and improve the sales of products to
increase revenue.
In addition, according to the semi-structured interview, Company A set up a
distribution group with 12 persons both from original Company A and Company B,
these persons played key roles to integrate the distribution. Therefore, the integration
of human resource must be considered while companies are integrating market.
6.2.4.3 Price
As can be seen from Table 1, products in Company A are set at a higher price, from
product A to product E, the highest price can reach 5kr, even the lowest price still
keeps above 2kr, therefore its positioning are mostly at the high and medium levels.
Also, we can see prices for product I to product V are kept at a low level: the highest
price can reach 2.5kr, and the lowest costs only 1kr. As a conclusion, positioning for
Company B is aimed at low and medium markets, which are generally a level lower
33
than Company A.
From the theories, we can know that when integrating the prices of two companies
after the main integration, if the acquired company has a lower segmentation with a
low market price, and the acquiring company wants to therefore open the new market
with a low positioning, there is no need for the new company to change the price
(Weber & Dholakia, 2000). As Ms Dai stated in the interview from the empirical data,
Company A want to occupy all levels of Chinese biscuits markets positioning. Since
the products from Company A are set at high and medium levels and products
originally from Company B are set at low and medium market positioning, there is no
need to change the price after the integration, because it is a good opportunity for
Company A to open the low markets in utilizing Company Bs products.
Meanwhile, the price of newly innovated product should be set according to the latest
market orientations like the standard of paying and the capacity of customers paying
(Haberer, 2008). As shown in the empirical data, the markets are paying more
attention to healthy biscuits with nutritional elements, grains biscuits are becoming
increasingly popular. Since the germ is very unstable to be conserved and is
indispensable for the new product, innovation for the stable germ technique can
raise the general positioning as well as the price of the new product. Consequently, the
price for the new product product F is set at 4kr (see table 2), which reaches the
high positioning of the biscuits market. On one hand, the high technique raises the
cost of the producing, and on the other hand, although Company A starts to occupy
the low and medium market positioning, it still need to keep the high positioning
products in production to target people who only focus on the products that satisfy
them.
6.2.4.4 Promotion
According to Weber and Dholakia (2000), the acquiring firm should consolidate
promotion efforts for the brands of the acquired firm. At the beginning of the
post-acquisition integration, many brands come from Company B and customers
know those brands belong to Company B. Therefore, Company A must enable
customers to know these brands belong to them currently. Advertising is a function
that can help Company A reach a lot of consumers at the same time and convey
diversity regarding messages (Kashani & Turpin,, 1999). Company A chose the
television as their advertising platform, and played it after a popular program, this
would increase the rates for noticing the products by audience, although the costs of
advertising were high, through this advertisement, Company A achieved their desired
objectives. More and more customers knew the new products in Company A. This
means the customers who choose Company As brands will increase and know these
brands belong to Company A as well. It corresponds with Hopkins (1987)s point that
high advertising costs may promote the acquiring firms entry into new markets.
34
Kotler and Armstrong (1994) point out that personal sellings purpose is to make sales
and build customer relationships. Therefore, the persons who have full experience are
helpful for the company to sell products. Since Company B assigned their factories
staffs to promote their products in the second and third-tier cities, and these persons
are familiar with those products, company A employed all the employees in Company
Bs factories so that these staffs can keep on promoting using their experience.
Although the sales salaries are expensive for Company A, these experienced staff
members are crucial for Company A to establish the relationships with markets.
Although the sales promotion like temporary price reductions, displays, coupons and
so on (Lancaster & Reynolds, 2005) may help companies achieve synergistic benefits
(Weber & Dholakia, 2000), Company A did not use this tool. Similarly, the means of
public relations may enable the message of products get to the buys, which is avoided
by salespeople or advertisements. However, during the post-acquisition integration,
Company A did not utilize this way to expand its popularity.
35
7 CONCLUSIONS AND IMPLICATIONS

In this chapter, we will conclude what we have discussed in the analysis part
and to give out the implication of the study, also further researches about what
we havent done can be discovered.
7.1 Conclusions
Our research question of this thesis is: How do companies successfully manage the
market integration during the post-acquisition? And the purpose is to exploit
successful management of market while company is executing post-acquisition
integration in this thesis.
During the whole thesis, authors have answered the research question through the
analysis of the empirical data with theories which are referenced. The question is
answered through five categories, which are acquisition types and motives, market
macro environments, market segmentations, market positioning strategy, and
marketing mix.
First of all, in order to choose the correct post-acquisition integration type and to well
manage the market integration, it is very important to understand the type and motive
of the whole acquisition project itself. Since the Company A acquired Company B to
develop the biscuit market in China and enhance the revenues in the global markets, it
chose the horizontal acquisition to create the value.
Then, when it comes to management of market integration, macro environment
become the first condition to be considered. They seized the opportunity of biscuit
market in China, and satisfied Chinese social, legal, political environmental
conditions which helped them develop the business in China smoothly. The
improvement of technology enable Company A increases the production and quality,
besides supplying for the Chinese market, it can also supply for the other countries in
the worldwide, this improved the internationalization for Company A as well as.
After analyzing the external macro environment, it is easier for the whole Company A
to divide the market segmentations and formulate the positioning strategy. As the
authors have found out, Company A uses the psychological segmentations to divide
the Chinese biscuit markets into several segmentations, namely healthy and nutrition,
taste and shape, calories content, or convenience. Whats more, since Company As
original market positioning has occupied the high and medium positioning, and as
Company B, one of the biggest competitor which has occupied in the medium and
low market positioning, it is a good opportunity to cover all the market positioning
36
from high to low, and to consider customers in all levels from old to young.
Since Company A chooses the proper market positioning strategy, it moves to focus
on categories of marketing mix, which contains product, place, price and promotion.
The authors discover that all the marketing mix is depending on the positioning
strategy Company A made. Since Company A wants to explore in all the positioning
levels, they integrate Company Bs products under its own logo however without
changing the biscuit styles, because Company Bs products gain a large population in
the low market positioning. Whats specially, during the process of changing the logo
of Company B, Company A took a transition to use both logos of Company A and
Company B, for they hope the customers who are loyal to products from Company B
can get used to the change and become their new customers owing to Company B.
Whats more, innovative product with special technique has been made to attract more
customers and to set up the NO.1 position of Company A.
Still, Company A has not changed a lot about the price of products originally from
Company B, because they still need Company Bs products to cover the medium and
low markets. Prices of Company As biscuits products will cover from the most
expensive level to the cheapest level. Moreover, in order to clear the situation existing
in the grain biscuits markets, Company A launches a new product with high context
standard, with the new innovative technique, it is obviously set at the highest level of
price, for it is not only the authority of the grain market, but also the leading
company in the biscuit market.
The integration of place is crucial for Company A during its post-acquisition
integration. Through integrating purchasing with Company B, Company A can save
costs and time for the purchasing, after integrating Company Bs factories, the
technology from each factories are complementary, the production of biscuit are also
increased for the Chinese market and other countries. In addition, Company A got the
second and third-tier cities in China speedily through the integration of Company Bs
distribution channels, it enables Company A expand the market in Chinese market and
own the whole market channels in China.
In addition, Company A utilized the promotion of advertisement let consumers know
their new brands from Company B, through the advertisement, Company A expands
the brands popularity so that they occupy the larger market. The integration of staff
also made Company A gain a lot of staff who have rich experience to promote.
However, Company A can also utilize the tools of sales promotion and public
relations to increase its popularity and finally enhance its sales.
Finally, the authors also find the integration of human resource is important during the
post-acquisition integration, since the managers from Company B were familiar with
their original distributions and the staffs from Company B owned experience to sell
products in second and third-tier cities. Therefore, once the human resource
37
integration succeeds, market integration could be implemented effectively.
7.2 Implications of this study

After analysis, we found that when a company wants to achieve internationalization
through acquisition, the market integration during the post-acquisition is important
and necessary. Through the research of different aspects, the acquiring companies will
not just satisfy the different markets itself, but also utilize the acquired companies
superiority to occupy the new market speedily. The acquiring companies want to clear
what the strengths and weaknesses are in different markets, and then retain the
strengths and get rid of, or mitigate the weaknesses.
Furthermore, since this research is based on the Chinese market, so it is meaningful
for the companies which want to enter in Chinese market, especially for companies
similar to Company A. For those companies, they can realize what they want to
consider and operate when they manage the market integration during the
post-acquisition.
7.3 Future research

Since the limitation of the time and resource, only one biscuit company which entered
in Chinese market was chosen. In addition, we only connected the acquiring company,
but the acquired company was not connected. For future research, it will be better if
the researchers can gather information from acquiring company and acquired
company in the meantime, so that the integration information from both companies
will be complete and the researchers can compare them between two companies and
find the impacts not only for the acquiring companies but also for the acquired
companies.
Furthermore, the human resource integration is also very important for market
integration, it will impact companies final success of acquisition. When future
researchers study market integration, they can study human resource integration
meanwhile.
Additionally, we only chose Chinese market as the developing country, and there may
be several different conditions in other developing countries. Therefore, future
researches can choose more cases in different developing countries to compare it.
Furthermore, the industry can be expanded and companies marketing form can also
be diversification.
38
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9 APPENDIX: SEMI-STRUCTURED INTERVIEW

GUIDE
The following questions will be used only for the authors intended academic study.
A. FACE SHEET QUESTION
1. What is your position in the company?
2. How long have you been working in this company?
3. Do you have any cross-broad acquisition experience? If the answer is yes, could
you please tell us about it?
B. COMPANYS BASIC INFORMATION
1. When and where did your company found?
2. How long have you been in the Biscuit Industry?
3. How many employees do you have in your company
C. INFORMATION ABOUT ACQUISTION
1. Why do you want to use the acquisition strategy as an entry strategy of
internationalization? In other words, what are the main objectives for acquisition?
2. How many cross-broad acquisitions have your company engaged in the past?
3. How do you think about your acquisition of Company B in China?
D. INFROMATION ABOUT POST-ACQUISITION INTEGRATION

1. During the post-acquisition, how long does integration of two companies (your
company and Company B) lasted?
2. How many factors do you think are crucial during the integration process?
3. During these factors, how many efforts have you put in the area of market
integration?
4. How do you separate the segmentations of the Chinese biscuit market?
5. How do you think about the macro-environment of china, and based on these
environment, how do you make the positioning strategy?
6. Depend on your market positioning, how to integrate the brands from your
company and Company B?
7. If some brands of Company B gain a large population, will you replace Company
Bs logo with yours immediately after acquisition or still keep it?
46
8. According to the product life cycle, when your product is trend to decline or/and
the market is nearly saturated, would you use Company Bs product to
compensate the market or innovate new product?
9. Whats your experience of taking advantage of the factories, warehouses,
transportation, and distribution channel of Company B during your integration?
10. In the process of integration, cost will fluctuate by various impacts, based on this
will you adjust the price of products?
11. In order to communicate information with customers more efficiently, you will
certainly utilize the promotional channels of Company B, could you tell us the
detail of it?
12. One of the advantages of acquisition is to obtain the promotional resources of
Company B, could you explain about it?
47

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Internationalization of firms through

Supervisor: Gabriel Awuah

Halmstad University, Halmstad, May, 2011

Keywords: post-acquisition, market integration, marketing mix

6.2.4.3 Price .......................................................................................................................................33

1.2 Research question

Since this study is based on internationalization, the acquisition is only about

Since acquisition has become an increasing important vehicle for companies to

3.1 Acquisition types and motives

3.2 Market integration management of post-acquisition

3.2.2 Market segmentations

3.2.3 Market positioning strategy

3.2.4 Marketing mix

4.1 Research approach

4.2 Case study

4.2.1 Case selection

4.2.2 Data collection

4.2.3 Case analysis

4.3 Reliability and validity

generating understanding, reliability is crucial for a good quality research

5.1 Company brief Background

5.2 Acquisition types and motives

Figure 1(2010 face sheet, 2010, p.2)

Figure 2 (2010 face sheet, 2010, p.2)

5.3 Market integration management of post-acquisition

5.3.2 Market segmentations

5.3.3 Market positioning strategy

5.3.4 Marketing mix

Product I Product IIIProduct IV

6.1 Acquisition types and motives

6.2 Market integration management of post-acquisition

China, meanwhile, according to the different sales volume in different regions,

6.2.2 Market segmentations

In order to understand the customers demand, basic psychology like interests,

6.2.3 Market positioning strategy

6.2.4 Marketing mix

7 CONCLUSIONS AND IMPLICATIONS

integration succeeds, market integration could be implemented effectively.

7.2 Implications of this study

7.3 Future research

Hopkins, W. E. (1987). Developing the planning skills of engineers in management

horizon, pp. 30-37.

Buckingham: Open University Press.

Psychographic Segmentation, (2011). Retrieved Apr. 1,

9 APPENDIX: SEMI-STRUCTURED INTERVIEW

D. INFROMATION ABOUT POST-ACQUISITION INTEGRATION

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